Correlation Between Visa and Nano X

Can any of the company-specific risk be diversified away by investing in both Visa and Nano X at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and Nano X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Visa Class A and Nano X Imaging, you can compare the effects of market volatilities on Visa and Nano X and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Visa with a short position of Nano X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Nano X.

Diversification Opportunities for Visa and Nano X

0.62

Correlation Coefficient

Visa  Nano X

Poor diversification

The 3 months correlation between Visa and Nano is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Nano X Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano X Imaging and Visa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Visa Class A are associated (or correlated) with Nano X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano X Imaging has no effect on the direction of Visa i.e., Visa and Nano X go up and down completely randomly.

Pair Corralation between Visa and Nano X

Taking into account the 90-day investment horizon Visa Class A is expected to under-perform the Nano X. But the stock apears to be less risky and, when comparing its historical volatility, Visa Class A is 2.22 times less risky than Nano X. The stock trades about -0.02 of its potential returns per unit of risk. The Nano X Imaging is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  493.00  in Nano X Imaging on May 6, 2025 and sell it today you would lose (8.50) from holding Nano X Imaging or give up 1.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Visa Class A  vs.  Nano X Imaging

Visa Class A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Visa Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Visa is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nano X Imaging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano X Imaging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Nano X is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Visa and Nano X

The main advantage of trading using opposite Visa and Nano X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Nano X can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nano X will offset losses from the drop in Nano X's long position.

The idea behind Visa Class A and Nano X Imaging pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.